The Price of a European Put Option on Bombardier Stock

question 80

Multiple Choice

The price of a European put option on Bombardier stock with one year to expiry is trading at $2.25,and the price of a European call option is trading at $1.50.If the stock is currently trading at $4.75,and the risk-free rate is 4%,what is the exercise price of the options?

• A)$3.75
• B)$3.12
• C)$5.72
• D)$4.75
• E)$3.03

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Definitions:

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A long-term change in the Earth's climate, especially a change due to an increase in the average atmospheric temperature.

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The increase in the level of the world's oceans due to the effects of global warming.

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The removal of a forest or stand of trees where the land is thereafter converted to a non-forest use.